The Dark Side Of Impact Fintech Ecosystems: Unstraining The “Tug Of War” Of Conflicts Among Actors

Impact fintechs have emerged as promising actors to address inequality and advance sustainable change. Yet their potential is often constrained by underlying conflicts, where an invisible “tug of war” undermines value creation and fuels persistent tension among actors within the ecosystem. This study examines the “dark side” of impact-driven fintech ecosystems by analysing such conflicts between fintechs and six key actors’ groups: investors, customers, traditional financial institutions, regulators, supporting organizations, and technology providers. Based on semi-structured interviews with twelve founders and co-founders of ten Brazilian impact fintechs, we reveal how misaligned interests, values, and priorities hinder innovation and value co-creation. Our findings advance theory by reframing ecosystem challenges through a conflict-oriented lens and offer practical strategies to “unstrain” these relationships. For practitioners and policymakers, this entails trust-building, regulatory simplification, and multi-actor collaboration.